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Law Offices of Seymour Wasserstrum
205 W Landis Ave
Vineland, NJ 08360

1040 Kings Highway North
Suite 404
Cherry Hill, NJ 08034

Phone: 856-696-8300
Toll Free: 1-888-845-4533
Fax: 856-696-3586

Free consultations • Credit cards accepted • Evening and Weekend appointments available • Open 8 am to 8 pm

Chapter 7 Bankruptcy

Wipe Out Your Bills Now - Its Easy When You Know How

Chapter 7 - What You Must Know

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

Chapter 7 is an ideal way to wipe out your unsecured debts. Chapter 7 takes about 4 months. When a Chapter 7 is over, your case is done and you receive a discharge from the Bankruptcy Court. This means that your bills are legally wiped out, and you are entitled to a fresh financial start.

The following objectives can usually be accomplished by successfully completing Chapter 7:

(1) Completely wipe out your credit card debt. Chapter 7 is an excellent way to wipe out all of your credit card debt and stop those bill collectors and collection agencies from constantly calling you.

We have found that many clients have no idea how much their interest rate is on their credit card debt. I have seen credit card debt as high as 32.99%. Isn't that outrageous when you consider what kind of interest rate you earn when you put your money into a bank account?

(2) Medical bills, dental bills, doctor bills, hospital bills. You can wipe out all sorts of medical bills that are not covered by insurance, and you can be released of all responsibility for those bills.

(3) Utility bills such as gas, electric, telephone, cable, and cell phone bills. You can wipe out your utility bills. A public utility such as Atlantic City Electric, Verizon, and South Jersey Gas must continue to provide you with service in the future. Cell phone bills are a little bit different. Cell phone bills can be wiped out, but cell phone companies are not legally required to continue to provide cell phone time for you.

If your cell phone company doesn't allow you to have additional cell phone time in the future, there are many other providers that are usually willing to give you service, and you can keep your same phone number. You can usually save substantial money when you wipe out your utility bills and your cell phone bills. There is more detailed information on wiping out utility bills on pages 16 through 19 of this pamphlet.

(4) Income taxes that are more than 3 years old and that were filed more than 3 years ago. Chapter 7, believe it or not, can often help you wipe out certain income tax bills owed to either the IRS, or to the State of New Jersey. We need to specifically review each situation before we can advise our client whether or not his/her income taxes can legally be wiped out in a chapter 7.

(5) Personal loans. If you have an unsecured loan from a place such as Beneficial, Household Finance, CitiFinancial, American General, or similar unsecured loans, you can normally wipe them out in Chapter 7. The result may be different if the lender has taken security in the property that you own.

(6) Surcharges on your driver's license. New Jersey Motor Vehicle surcharges can usually be discharged in Chapter 7. Many people do not have a legal driver's license simply because they cannot afford to pay their surcharges. By filing Chapter 7, you can get your license back, provided that failure to pay surcharges is the only reason keeping you from getting your license.

(7) Legal fees. You can usually even wipe out legal fees that you owe to an attorney for services performed.

(8) Stop wage executions on your salary. Chapter 7 automatically prohibits and stops most wage executions. In fact, if there has been a wage execution against you that has taken $600 or more out of your salary over the previous 90 days before filing your Chapter 7, many times we can get that money back for you. Please make sure to let us know if this applies to you

(9) Frozen bank accounts. A lot of times creditors freeze your bank account and you start bouncing checks because you never saw it coming. If that money has not been turned over to the creditor as result of a Court order ordering turnover of funds, in many cases we can get the frozen funds released back to you fairly quickly.

(10) Sheriff's Sales of personal property or other property. If the Sheriff has scheduled a sale of some of your personal assets such as a car, household items, or other personal property, that Sheriff Sale can be stopped by filing Chapter 7.

Get a Fresh Start, Get Debt Relief and Stress Relief

Remember that one of the main purposes of Chapter 7 is to help you get a fresh financial start, put the past behind you, and wipe out your bills so that you are free of burdensome debt. Chapter 7 stops creditors from calling you and driving you nuts.

There is no shame or stigma attached to filing a Chapter 7 case. About 1.5 million people file for Bankruptcy every year, on the average, in the United States. Done properly, it can be a very positive experience that will help you have a much brighter financial future.

Obviously, there is a lot of financial stress when you've got a lot of bills. Keep in mind that there is a light at the end of the tunnel, and in most situations our clients get not only substantial debt relief but substantial stress relief. We can teach you how to stop collection agents from calling you, harassing you, and stopping any all contact completely. We will show you how.

We have observed that for most people, when you get into a difficult situation and have to file a Chapter 7, the events that have led up to the need to file a Chapter 7 are not your fault. Perhaps you lost your job because your employer closed down or moved its business. Maybe there were unexpected medical problems for yourself or a member of your family. Maybe a break up of a relationship contributed to the financial difficulty.

It's not your fault that you've got these challenging money issues.

You can be thankful that the law in the United States gives us the opportunity for a fresh start. In fact, the roots of bankruptcy are in the Bible, in the Book of Deuteronomy, which speaks of the forgiveness of debts.

When your case is over your debts will be forgiven. It is also important to forgive yourself if you feel badly about your situation. You want to make this a positive experience that you can learn from.

If you have engaged in certain habits that have led you to financial difficulty, consider whether it would be a good idea to change some of your habits in the future. Would it be a good idea to change your thinking about money? Maybe you'd like to consider how you can save more money and spend less, so that you have a much brighter future.

It doesn't matter how much you owe in unsecured debt. You could owe $5,000, you could owe $50,000, you could owe $250,000, or you could owe $1 million. If you qualify for Chapter 7 you walk away with a discharge after about four months, and you are free and legally released from those debts. Your debts have been forgiven.

Take a moment and visualize yourself four months from now, debt-free. What is that going to feel like?

Are there things you are going to be able to do then that you can't do now? What could your life be like when you are debt free?

Our legal fee for Chapter 7 is only $1265. The Bankruptcy Court charges a $335 filing fee. There are also two counseling sessions that you must do to file for Bankruptcy and get your discharge. Each session costs $50. You must do the first counseling session before you file for Bankruptcy, and you must do the second counseling session shortly after you have your Bankruptcy meeting with the Trustee. If you don't do the second session you won't get a discharge and it defeats the whole purpose of the Bankruptcy.

The first counseling session can be done by telephone or on the internet. It usually takes between 30 to 60 minutes. The second counseling session is done by phone and usually takes somewhat longer than an hour.

Seymour has studied a lot about financial planning, money management, and investing. He is happy to discuss money management issues with his clients.

We would like to help you get a fresh start, and we don't want to see you get into trouble again in the future. We can suggest some books and websites that will help you with your future money management.

Feel free to ask Seymour, and he will be happy to offer you some suggestions.

The following section sets forth the easy steps that are involved in preparing, processing, and completing a successful Chapter 7 case. The object is to get a discharge and wipe out all of your unsecured debts. Let us help you accomplish your goal.

Step One

A Chapter 7 bankruptcy is started by the filing of a document called a petition. The petition is about 30 pages long. We must meet with you for approximately an hour to complete the necessary documentation. The case officially begins when the Chapter 7 petition is filed with the Bankruptcy Court, and a $335 filing fee is paid to the Court. We now utilize electronic filing, which means that we file your bankruptcy case right from our office and get you instant results.

Our office can immediately notify any creditors that need to be notified of the filing by calling them and mailing, faxing, or hand delivering a stamped copy of your petition to that creditor. If a creditor takes action against you after being informed that you have started your bankruptcy, that creditor can be sanctioned by the Bankruptcy Court.

The Bankruptcy Court Clerk's Office also sends out notices to all of your creditors. These notices are sent a few days after your case is filed. You will be getting copies of the same notices that your creditors get. Therefore, when you get your notice in the mail you know that your creditors are getting their notice in the mail also. If someone needs to be notified right away, before they get the official notice from the court clerk, let us know and we can notify them immediately.

Here are some examples of the types of creditors that can be notified of your bankruptcy filing:

(1) If you are behind in your utility bills, we can notify utility companies so that your utilities are not shut off. You can normally wipe out your utility bills through a bankruptcy filing. If your utilities have been shut off before your bankruptcy has been filed, the utility companies will have to turn service back on after your bankruptcy has been filed.

(2) Mortgage company foreclosure proceedings or sheriff sales are usually stopped.

(3) We can notify car finance companies so that there will be no vehicle repossessions. If your vehicle has been repossessed, it would normally have to be returned to you upon submitting proof of full coverage automobile insurance.

(4) If your landlord is trying to evict you, we may be able to stop that.

(5) If the IRS is withholding your refund or taking other action against you, that has to stop upon filing of bankruptcy.

(6) If anyone is trying to attach your wages, they will usually have to stop. If anyone already has a wage attachment against you, that will usually have to stop. If any money is taken out of your wages after your bankruptcy has been started, it will usually have to be returned to you by the creditor that too your money. Sometimes we can even get money back that was taken as a wage execution before you filed bankruptcy, so please let us know if you have a wage execution. If they took $600 or more from your salary within the 60 days before your case is filed, there is a good chance that we can get you the money back.

(7) If anyone has frozen your bank account, you may still be able to get your money back.

(8) If you have lost your driver's license due to inability to pay surcharges, we can work on helping you get your license back.

(9) If anyone is suing you for just about anything, that lawsuit will usually have to stop, unless the bankruptcy court gives the creditor or any other party that is suing you permission to continue with the case against you.

Step Two

The court will assign a case number to your case. With electronic filing, we now get an immediate case number. You will also receive a copy of the case number in the mail within about a week after your bankruptcy case has been filed.

You will receive a document from the bankruptcy court called Notice of Chapter 7 Bankruptcy Case. Your creditors also receive this document and that is their official notice from the Bankruptcy Court that you have started your case and listed them as a creditor. Please review that document carefully because it gives you information as to when and where you need to appear for your bankruptcy meeting. The meeting is called the Meeting of Creditors, but actually creditors hardly ever appear.

The bankruptcy meeting is not before a judge. It is simply before a person appointed by the court to act as what is called a "trustee". The meeting usually takes five to ten minutes, and is usually very easy. There is nothing to worry about. The meeting is normally scheduled in Camden at the Bridge View Building. We will give you directions. If you live in Cape May County or Atlantic County, the meeting is scheduled in Northfield.

THIS IS WHAT HAPPENS AT YOUR CHAPTER 7 MEETING

You will normally be required to bring copies of you tax returns for the last two years and a couple of recent pay stubs to the meeting. If you own real estate, you need to bring a copy of your deed, and a copy of all mortgage payoffs which indicate the amount of money you still owe each mortgage company. We need to show the fair market value of every property you own, and often times you will need to present an appraisal or comparative market analysis to show the value.

If you need help in obtaining a market analysis for your property, let us know and we can refer you to people who can perform a market analysis for a reasonable fee.

If you own a car, you will usually be requested to bring a copy of the payoff from the finance company, if your car is financed. We will be there with you at the meeting and you will be fully prepared to answer all questions. You probably know all the answers to those questions already because they are very basic and simple.

When you go to your meeting, you must bring your social security card and a government approved photo ID. If you do not bring these items, you will probably have to come back again. The following is the procedure:

1) You are sworn in by the trustee to tell the truth. Your attorney is with you. It is usually pretty informal. The meeting will take about 5 or 10 minutes in most cases.

2) You need to present your social security card and a valid government approved photo ID. If it is a driver's license, it should be a current license and not an expired license.

3) You will be asked to verify your signature on the bankruptcy petition. You will also be asked to verify that you reviewed the petition before you signed it and that all the information was true and correct. If there are any changes or additions you want to make, let the trustee know at this point. Tell your attorney about any changes before you go in front of the trustee.

An example of a change would be a new address, new job, adding a new creditor that you might have forgotten, or any other corrections or additions that were not originally included for whatever reason.

4) If you own a house or real estate, the trustee will ask you the following:

  • a) when did you buy the house or real estate
  • b) what was the purchase price
  • c) what is the property worth now. As stated above, you will probably need an appraisal or comparative market analysis to establish the value of the property.
  • d) what is the payoff on any mortgages you owe; for each mortgage, you need to bring a recent payoff statement which says what you still owe to pay off that mortgage in full
  • e) You should also bring a copy of the deed for each property you own.

5) If you have financed a car, the trustee may ask you to show a payoff statement for each car loan that you have obtained.

6) The trustee will normally want to see one or two recent pay stubs. Bring a pay stub that shows what your average weekly or biweekly income is. Don't bring a pay stub that shows too much income because of unusual overtime. Don't bring a pay stub that shows too little income because it does not cover a full pay period.

7) The trustee will normally want to see your tax returns for the last two years, so please be sure to bring them unless for some reason you were not required to file tax returns.

8) After that, the trustee will usually conclude the hearing, and you are now on your way to obtaining your discharge and wiping out your debts.

Step Three

After the meeting is concluded, the trustee will submit a report to the bankruptcy court to indicate that you qualify for bankruptcy and that you should be approved. If for some reason the trustee does not feel that your bankruptcy should be approved (this is pretty unusual), the trustee will let us know what has to be done so that your bankruptcy can be approved. This might happen in about 5% or less of the cases that are submitted.

After your meeting, you will be getting one or more documents from the bankruptcy court and you should be aware of what those documents mean. The most important document is the Bankruptcy Discharge. This will be received about three months after you have had your meeting. Keep this because this is the proof that all of your debts have been legally wiped out. If any creditor ever tries to collect in the future and you have listed that creditor in you bankruptcy, the discharge is your proof that your debt has been wiped out.

If you own real estate, you will probably get what is called a Notice of Proposed Abandonment of Property. This means that the trustee is abandoning any claims of creditors against your property and that you can keep your property without any problem. If you read the document, it is worded in a way that might cause you to worry if you did not know ahead of time what it meant. Because the document is called Notice of Abandonment, people sometimes think that they must abandon or give up their property.

That is totally incorrect. In fact, the opposite is true and it is good news when you get that document. The document mentions a court date in the event anyone objects. It is extremely rare that anyone objects, and you do not have to go to court on the court date mentioned in the Notice of Abandonment. Thus, when you receive the Notice of Abandonment, it is great news, and you are on your way to successfully completing your case and receiving your discharge.

Step Four

If you are working and paying your bills after bankruptcy, you might be very pleasantly surprised to see that credit card companies are soliciting you and offering you credit cards after you have been discharged. This is not unusual, and it is not very hard to re-establish credit if you maintain good employment and pay future bills. If you ever need assistance with buying a house, obtaining a mortgage, or financing a car in the future, feel free to call us because we know people in the business that help people who have gone through the bankruptcy process.

Step Five

After you have your discharge, you are legally entitled to the fresh start provided by the bankruptcy laws. Obtaining your discharge is the official conclusion of your bankruptcy case in most situations unless you are expecting to receive a substantial asset in the future, such as a large settlement on a personal injury case. In that type of situation, the bankruptcy court could keep your case open until the court has complete information as to the amount of your personal injury settlement. If you inherit any property within six months of filing your bankruptcy, you must notify the bankruptcy court.

Step six

Most people find that their lives are much better after they have gone through the bankruptcy procedure. Married couples have told us that their marriage has improved because of much less financial stress and tension.

You do not have to wait for your discharge to get your fresh start, because all creditors have to stop contacting you immediately upon the filing of your bankruptcy. Therefore, if any creditors contact you directly after you have filed bankruptcy, simply tell them that you are in a Chapter 7, give them the date your bankruptcy was filed and your case number, and they have to leave you alone. If they do not leave you alone, they may violating federal laws, you could possibly sue them, and you might get rich.

THE GOAL IN CHAPTER 7

For most clients, the goal in Chapter 7 is to wipe out all of their unsecured debt, obtain a discharge from the Bankruptcy Court, and keep all of their assets. When filing Chapter 7, you are allowed to own a home, cars, jewelry, and other assets, and you may maintain active bank accounts. You are allowed to have money and assets and still wipe out your debts. You normally receive your discharge about 4 months after your filing.

There are certain legal restrictions on the amount of assets you can own and still wipe out all of your unsecured debts. For example, a married couple can have $40,400 equity in their home and still wipe out the unsecured debts. If the equity in the house is larger, then it is possible that some of the unsecured creditors will be paid a small portion of their debt. If one person owns his/her home, the equity limit is $20,200. As long as the equity in the home is less than $20,200, unsecured debts can normally be completely wiped out.

The trustee in every case reviews your income and expenses. The amount of income you earn per month compared to the amount of reasonable expenses you have per month can be a factor in determining whether you can wipe out all of your unsecured debt. Let's assume you have $40,000 in credit card bills that you would like to wipe out. You need to list your income and expenses on a monthly basis, and you may need to demonstrate that you simply do not have enough money to pay the normal monthly bills, let alone your credit cards.

For example, if you earn $2000 per month and have $2000 in reasonable and necessary expenses, then you obviously can't afford to pay the credit card bills and you can wipe them out. On the other hand, if you earn $2000 per month, and if you have only $1500 per month expenses without the credit card bills, then the Court could feel you have $500 per month leftover and that you can use that $500 to pay towards your credit card bills and other bills. It this occurred, the Court might require you to pay some of the credit card bills.

Feel free to contact us any time you have any questions. We are here to help you. I have been practicing as an attorney in New Jersey since 1973. I enjoy helping people get out of debt, and I have done so for literally thousands of people.

I also present seminars in our office to help people plan and budget better in the future so that bankruptcy can be turned into a positive experience. You are entitled to a fresh start, and you may be able to completely turn around your financial situation with a change in attitude towards money and spending habits. Money management is the key. We would like to help you increase your knowledge about finances, and about utilizing a spending plan, so that you can start on the road to wealth creation in the future. I also do a live radio program, Bankruptcy University, on Thursday nights at 8 pm on FM station WVLT 92.1. Feel free to listen and call in during the show for live discussions.

Contact the Law Offices of Seymour Wasserstrum for a free consultation with an experienced Chapter 7 Bankruptcy lawyer in New Jersey.